AWE said it would evaluate the offer of A$0.73 a share, pitched at an about 11% premium to AWE's close on Dec. 7 and 34% above AWE's close before the first bid was disclosed. It told shareholders to take no action.

Its shares rose to A$0.74 after the bid was announced, before closing at A$0.73.

The Chinese firm, which runs oil and gas projects and LNG plants, said it was attracted to AWE for its stake in the Waitsia gas field in Western Australia.

"It is for this reason that CERCG Australia is prepared to pay such a substantial premium for AWE," the company said in a statement.

CERCG decided to make a bid directly to shareholders after AWE's board shunned an earlier approach which CERCG had asked its target to keep confidential.

CERCG said after AWE disclosed the earlier approach last month it had received calls from shareholders who welcomed a bid and said the board should have allowed CERCG to look at the books.

"There has been surprisingly broad and widespread encouragement," said Eddie Rigg, CERCG's adviser at Argonaut in Perth, adding the firm had even heard from potential Waitsia gas customers.

He declined to name which shareholders had approached CERCG.

AWE's top shareholder is Ellerston Capital, backed by Australian billionaire James Packer. It owns a 13.1% stake.

This is the fourth offer that AWE has received in the past four years, but only the first one that AWE's shareholders will get to look at.

The offer remains well below Royal Bank of Canada analysts' valuation of A$0.91, based on the strong prospects for the Waitsia Field.